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SAP shares fall as the German-based software firm buys Qualtrics

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SAP shares are lower Monday, as the German-based software business announced the purchase of US tech company, Qualtrics, for $8 billion. The deal has already received approval from both boards and comes ahead of a planned IPO from Qualtrics.

By 1325 BST, SAP shares were 3.99% lower at €91.37. The stock has been broadly flat-to-marginally-higher in recent weeks.

SAP acquires Qualtrics

SAP creates enterprise business software to help its clients manage their own finance, HR and logistics operations. The purchase of US-based firm Qualtrics will expand SAP’s customer base as it works to gain customer, employee and product feedback. SurveyMonkey is among Qualtrics’ competitors.

“We continually seek out transformational opportunities – today’s announcement is exactly that,” said SAP CEO, Bill McDermott. “Together, SAP and Qualtrics represent a new paradigm, similar to market-making shifts in personal operating systems, smart devices and social networks.”

“The combination of Qualtrics and SAP reaffirms experience management as the ground-breaking new frontier for the technology industry,” McDermott added.

Qualtrics was equally positive on the deal, even as it comes just ahead of a planned IPO of the business.

“Our mission is to help organizations deliver the experiences that turn their customers into fanatics, employees into ambassadors, products into obsessions and brands into religions,” said Qualtrics CEO, Ryan Smith. “Supported by a global team of over 95,000, SAP will help us scale faster and achieve our mission on a broader stage.”

SAP, Qualtrics deal details

The announcement of the deal shows that the boards of both businesses, plus Qualtrics’ shareholders have all approved the purchase.

SAP has also secured $7 billion funding to allow the deal to take place. The acquisition is expected to close sometime in the first half of 2019, once it’s gone through the typical process and regulatory requirements.

The deal, which is the largest for SAP in four years, is currently expected to see Qualtrics CEO Smith remain in place. Its branding is also set to stay as it will operate as a separate business under the SAP Cloud Business Group.

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